Robinhood Reports 112% Jump in Crypto Trading Volume, but There’s a Catch

Robinhood has reported a 112% year-over-year increase in cryptocurrency trading volume, reaching $14.4 billion in the third quarter of 2024.

However, this surge comes amid a decline in trading activity compared to earlier in the year, with volumes peaking at $36 billion in the first quarter and dropping to $21.5 billion in the second quarter.

Results Fall Short of Analyst Expectations

Despite this slowdown in momentum in 2024, the trading platform experienced growth in its transaction-based revenue. The report indicates that income increased by 72% compared to the previous year, reaching $319 million. Of this, cryptocurrency trading accounted for $61 million, representing a 165% increase compared to last year. However, this figure was down from the $81 million generated in the previous quarter.

Overall, the company reported a net income of $150 million and total revenue of $637 million for the third quarter. However, these results fell short of analysts’ expectations.

The reported earnings per share (EPS) of $0.17 fell short of the Zacks Consensus Estimate of $0.18, while total revenue was 3.6% below the anticipated $661.2 million.

Other parts of Robinhood’s business also showed strong performance. Options trading revenues surged to $202 million, up 63% from the same period last year, and equities trading brought in $37 million, reflecting a 37% increase.

The company also revealed a rise in its Assets Under Custody (AUC). The metric grew by 76% year-over-year to $152.2 billion, fueled by net deposits from users and increased valuations of stocks and cryptocurrencies.

Robinhood Executives Comment on Q3 Results

Vlad Tenev, CEO and co-founder of Robinhood expressed his pride in the results, stating that they were a testament to how well the company’s “product engine is humming.”

Further, he highlighted recent initiatives such as the launch of Robinhood Legend, a new desktop platform, and the upcoming introduction of index options, futures, and a realized profit and loss tool.

Chief Financial Officer Jason Warnick noted the quarter’s overall strength, pointing to 36% year-over-year revenue growth that largely contributed to the bottom line.

Since launching its cryptocurrency unit in February 2018, Robinhood has expanded its offerings through various partnerships and initiatives.

Initially starting with Bitcoin and Ethereum trading, the stock brokerage firm has since broadened its offerings to include Litecoin, Uniswap, Avalanche, Chainlink, and various other tokens.